Music publisher Kobalt has reached a landmark licensing agreement with AI music platform Eleven Music, operated by ElevenLabs, a competitor to Suno. This opt-in deal promises a roughly 50/50 split of AI-generated music royalties between publishing and recorded music rights holders.
Crucially, Kobalt secured a Most Favored Nation (MFN) clause, guaranteeing that if any recorded music rightsholder negotiates better terms with ElevenLabs, Kobalt’s terms will automatically match those improvements.
The agreement complements ElevenLabs’ separate deal with indie rights group Merlin. Eleven Music’s current basic tier uses production music, while a forthcoming “Eleven Music Pro” will feature catalog cleared through Kobalt and Merlin.
This development arrives as the music industry confronts licensing challenges posed by generative AI, with some companies facing lawsuits for alleged copyright infringement.
Kobalt CEO Laurent Hubert emphasized that publishing should be compensated comparably to sound recordings on AI platforms. Traditionally, publishing receives about 25% of streaming royalties, while recorded music rights claim about 75%. Kobalt’s deal breaks from this norm, reflecting a fairer distribution aligned with contributions from copyrights on compositions and recordings.
“Think about what we’re offering [AI] platforms: publishers bring the lyrics and the building blocks of the composition. Labels bring the recording. I think it’s fair and logical to have parity,” said a publishing source familiar with the deal.
Eligible works for monetization under the Eleven Music agreement must have compositions fully controlled by Kobalt and corresponding master recordings cleared via Merlin or another licensed partner. This framework enables a fully licensed approach, with potential for other master and publishing partners to join.
Hubert described the initiative as a “pilot,” indicating potential expansion to other platforms and rights holders.
The agreement also incorporates strong content protection measures, including third-party content identification systems to prevent unauthorized use of copyrighted material. Additionally, Eleven Music prohibits user prompts that mention artist names, song titles, or label and publisher names.
Industry observers note the MFN clause could influence future AI licensing negotiations, possibly complicating agreements for large recorded music rightsholders who prefer higher revenue shares.
However, the 50/50 revenue split resembles synchronization licensing practices, where publishing and recorded rights often receive more balanced compensation compared to streaming royalties.
Hubert framed the Kobalt-ElevenLabs deal as offering “true choice in licensing Generative AI,” empowering rights holders to decide on participation based on clear terms.
Kobalt declined to comment further when contacted about the agreement.